Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which underlying accounting concept explains the use of level premiums in insurance accounting?

Materiality concept

Historical cost principle

Matching principle

Conservatism principle

Previous problemNext problem

Verified step by step guidance

Understand the Matching Principle: This principle states that expenses should be recognized in the same period as the revenues they help generate. It ensures that financial statements accurately reflect the financial performance of a company.

Relate the Matching Principle to insurance accounting: In insurance accounting, level premiums are used to match the cost of providing insurance coverage (expenses) with the revenue generated from premiums over the policy's duration.

Analyze why level premiums are applied: Level premiums spread the cost of insurance evenly over the policy term, ensuring that expenses and revenues align consistently, adhering to the Matching Principle.

Compare with other accounting concepts: Materiality, Historical Cost, and Conservatism principles do not directly explain the use of level premiums. Materiality deals with the significance of information, Historical Cost focuses on recording assets at their original cost, and Conservatism emphasizes caution in financial reporting.

Conclude that the Matching Principle is the correct concept: The use of level premiums in insurance accounting is a direct application of the Matching Principle, as it ensures expenses are matched with revenues over time.